A Mini-Split on the MPC

The minutes of the Bank of England monetary policy committee’s November meeting revealed a little bit of division on quantitative easing, seven members voting for a £25 billion increase to £200 billion, one (Spencer Dale) for no change and another (David Miles) for a £40 billion increase to £215 billion. The minutes also suggested that there will be no addition to the agreed amount (£25 billion) until February.

The markets were also interested in the fact that the committee discussed a cut in the rate on commercial bank reserves at the Bank, which it suggested “would bear down on short-term market rates, and could ease monetary conditions further”. While concluding that the impact would be small and that QE was a more effective way of operating, this is one to look out for. The minutes are here.

Also today, the Bank released the numerical parameters of its new forecasts. Growth will peak at 4.3% in the second quarter of 2011, its modal projections suggest. The mean is lower, 3.3%, but still pretty healthy. The projections are here.